Delhi Delhi: Air passenger traffic is expected to grow at a compound annual growth rate (CAGR) of 9 per cent during FY2025-2027, reaching around 485 million by FY27, according to a report by CareAge Ratings.
International air traffic growth is expected to outpace domestic traffic growth during the same period, supported by an increase in the wide-body aircraft fleet for domestic carriers from FY2026.
The report is based on the financial performance of 11 major private airports in India, taking into account their past and future passenger traffic and capital expenditure for the next five years.
Between FY2021 and the first nine months of FY2025, India’s airport operators, including the Airports Authority of India (AAI), have invested about Rs 80,000 crore in capital expenditure. Notably, 42 per cent of this investment was allocated for the development of greenfield airports at four locations.
Led by brownfield expansion, capital expenditure of Rs 1.1 lakh crore is expected during FY26 and FY30. Driven by tariff hikes and additional capacities, aero revenues are expected to grow at a CAGR of 42 per cent during FY24- FY27. Whereas, non-aero revenues are estimated to grow between 12-14 per cent CAGR during the same period. The Indian aviation sector has experienced a V-shaped recovery, with passenger traffic reaching 1.10 times the pre-Covid level in FY24. While domestic air travel recovered by FY23, international traffic recovered in FY24, reaching 1.04 times the pre-Covid level. The surge in air travel witnessed during the Maha Kumbh festival in Q4 FY25 is likely to partially offset the lower passenger growth for the remainder of FY25. The report estimates a Rs 30,000 crore increase in total capex during FY26-FY30, taking it to around Rs 1.1 lakh crore.
Notably, 18 per cent of the total capex has been allocated to city fringe development (CSD) and non-aeronautical development, highlighting efforts to enhance commercial and supporting infrastructure.
Meanwhile, domestic passenger traffic is expected to continue to grow steadily, growing from a high base. This growth will be driven primarily by brownfield airport expansion, generating funding opportunities of Rs 75,000 crore.
